re: MTT's rally METCASH TRADING made a net profit of $57.7...

re: MTT's rally METCASH TRADING made a net profit of $57.7 million in the year
to the end of April, - 78.4 per cent more than it made last year.
"Metcash said they would get earnings before tax and abnormals
of less than $100 million and they earned $107.8 million," said Mr Rafi
Peer of Vantage Analysis.
"I expected normalised earnings per share of 10.3c and they
achieved 11.65c.
"Their dividend doubled and they pointed out there will be
strong growth in profit as they company gets a full year's benefit from
the ex-Franklins stores that they wholesale to, which are owned by
Pick'n'Pay South Africa and Foodland."
Results might have exceeded expectations, but today's share
price performance is lagging behind the market.
What's going on?
"Metcash went above its fundamental value on speculation and now
it's on a 19.9-times price earnings ratio, which is reasonable for a
dynamic, growing retail business.
"This industry has limited growth potential and Metcash's
revenue can only grow by low single digit market growth, extended where
it can take market share from the majors, Coles and Woolworths.
"In 2002, it took just over two per cent.
"While they are predicting more than 20 per cent growth in net
profit (for this October half) compared to the previous corresponding
period, that's fully factored into the share price plus more," says
analysts Peer.